Tourism is one of the most popular industries in Canada. In fact, in the third quarter of 2020, $11.4 billion dollars was spent on tourism in Canada. Shocking, considering the impact of COVID-19 and the numerous restrictions on travelling. Clearly, travel and tourism are important to many Canadian and travellers from all over the world. Given the popularity of tourism in Canada, owning or running your own motel, B&B or vacation rental can be a lucrative investment.
If you own or wish to own a motel, bed n’ breakfast, or vacation rental, you’ll need access to a large sum of funds to not only help you get your business off the ground but to help you with the numerous costs associated with running a business.
Learn how to start a business in Canada.
Whether you’re running a motel, B&B or vacation rental company, a business loan, can help you finance an infinite number of expenses. Whether you use your loan to take on more employees, fix up your property, or move your business to a new location entirely, with the right type of financing, nothing is out of reach.
Running a motel, B&B, or vacation rental is no easy task. You need a number of employees to help run your business smoothly. In general, you’ll need a kitchen staff, a cleaning staff, maintenance employees, a manager and more depending on the complexity of your business. For example, you may need to hire professional instructors if your business offers certain activities such as yoga classes, dance classes, fishing, and other activities.
Check out how to set up payroll for your small business.
A business loan can help you build/renovate your business’s restaurant, bar, and kitchen. It can also help you upgrade your business by financing the construction of various outdoor sectors such as a garden, pools, fountains, walkways, security walls, or even a bowling/bocce court.
In order to legally operate your business in Canada, you’ll need to obtain certain permits and required licenses pertaining to your province. This includes a business license, a liquor license if you’re selling alcohol and other licenses for health and safety.
Most motels, B&Bs and vacation rentals have their own in-room amenities. A business loan can help you finance these in-room items such as bathrobes, towels, clothing items, bathroom products, and linen supplies. It can also finance the equipment and furniture you need to furnish your bedrooms (beds, televisions/digital cable boxes, cabinets/drawers, mini-fridges/bars, bathrooms, personal safes, desks, chairs, nightstands, etc.) and other building areas (lounge, reception desk, storage facilities, casino, games room, tourist activity center, spa, gym, etc).
| Amount | APR | Term (months) | ||
 | 1k-300k | Fee-Based: Starting at 9% | 12- 60 | Learn more |
 | 5k-300k | 8% – 29% | 6-18 | Learn more |
 | 1k-500k | +5.9% | 3-60 | Learn more |
 | Up to 300k | 8%-22% | 6-12 | Learn more |
 | 5k-500k | - | 6-18 | Learn more |
 | 100K + | 6.05% + | 60 | Learn more |
 | 5K-100k | 15%+ | 12-18 | Learn more |
Before applying for a business loan, it’s important to research and understand the cost of borrowing. Doing so will allow you to understand how much money you can borrow without it turning into unmanageable debt. Here are the main factors to consider when calculating the cost of your loan:
| Business Loan Amount | $25,000 | $25,000 |
| Interest Rate | 10.5% | 10.5% |
| Term Length | 36 months | 60 months |
| Monthly Payment | $812.56 | $537.35 |
| Total Paid | $29,252.20 | $32,240.86 |
| Interest Paid | $4,252.20 | $7,240.86 |
There are numerous credit products available in Canada that businesses can take advantage of. Depending on what you’re trying to finance, one option will prove more useful than another. Let’s look over some of these options and how it can help your business.
As a service-based business, much of your sales will come in the form of cash and plastic. If you have a consistent flow of revenue from your card sales, then a merchant cash advance can be a great option to borrow money quickly. It provides loans on the condition that you repay them with a percentage of your future card sales. While this form of financing provides fast funding and has low qualification requirements, it can be expensive. It should only be used in emergency situations where you need money quickly and don’t have any other options.
Every business owner should have a business line of credit. It is a form of credit that allows you to withdraw money up to a certain credit limit whenever you need it. Like a credit card, these funds can be reused as you pay them back. Moreover, you only have to pay interest on the amount you use. A business line of credit is a great solution for your business’s small or short-term expenses. For example, you can use it to catch up with your payroll payments, renew your license, or any other small expense.
Whether you’re running a motel, B&B or vacation rental, you’ll need to purchase certain equipment and furniture to furnish all the different areas in your business. This includes the bedrooms, halls, lounge area, kitchen, gym, and more. An equipment loan is a good alternative to a business loan, as it’s easier to qualify for a lower rate and higher loan amount. The reason is, the equipment you purchase acts as collateral for the loan. This security greatly reduces the risk for your lender as if you miss too many payments, the lender can seize your equipment to mitigate any further loss.
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Being an owner in the hospitality and tourism industries is a lot of work, but the reward can often be even greater, that’s why it’s so important to invest in the success of your business. With Loans Canada, you’ll find a business loan that provides you with:
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